April 2025

In the world of global economics, few topics get as much airtime, and as much misunderstanding, as trade deficits. At Avion Wealth, we believe our clients deserve clarity, especially on issues that could impact investment performance. So, let’s unpack the reality behind trade deficits and why they may not mean what you think. What Is a Trade Deficit, Really? Put simply, a trade deficit occurs when a country imports more than it exports. Think of more coffee beans coming in than aircraft engines going out. But trade isn’t just about physical goods—services like banking, consulting, and even entertainment count too. For example, while the U.S. often runs trade deficits in goods, it frequently has surpluses in services. Now, here’s where it gets more interesting: many of the countries that export to us rely on that income to service debt, often denominated in U.S. dollars and sometimes even owed to U.S....

As markets retreat, headlines rush to assign blame. Today, it’s tariffs. But beneath every market move lies a more complex web of causes and effects. At Avion Wealth, we believe that understanding this nuance is essential to long-term investment success. Let’s take a closer look at tariffs: what they are, how they disrupt the global economy, and where discerning investors might uncover opportunity amidst the volatility. What Are Tariffs, Really? Tariffs are taxes on imported goods, designed to make foreign products more expensive, and theoretically, encourage demand for domestic alternatives. While this may offer short-term protection to certain industries, the broader effects are more damaging than helpful. In reality, tariffs increase costs for businesses, raise prices for consumers, and provoke retaliatory measures from trade partners. This creates friction in global trade—the very foundation of today’s interconnected economy. The Ripple Effect on Global Markets The impact of tariffs doesn’t stop at...